Box tightens talk on $300 million five-year convertibles to fixed coupon of 0%, up 42.5%-45%

By Abigail W. Adams

Portland, Me., Jan. 11 – Box Inc. tightened talk on its $300 million offering of five-year convertible notes, which is slated to price after the market close on Monday, to a fixed coupon of 0% and an initial conversion premium of 42.5% to 45%, according to a market source.

Initial price was for a coupon of 0% to 0.5% and an initial conversion premium of 35% to 40%.

Morgan Stanley & Co. LLC is the bookrunner for the Rule 144A offering, which carries a greenshoe of $45 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They are putable upon a fundamental change.

In connection with the pricing of the notes, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include potential acquisitions.

Box is a Redwood City, Calif.-based cloud content management and file sharing company.

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